Qatari shipments to Europe under medium or long-term contracts will rise 22% next year, the biggest jump since 2009, according to data from Poten & Partners Inc, a New York-based shipbroker.
Bloomberg
Qatar is poised to boost contracted liquefied natural gas exports to Europe by the most in five years as prices in the region are at their highest since 2006.
Qatari shipments to Europe under medium or long-term contracts will rise 22% next year, the biggest jump since 2009, according to data from Poten & Partners Inc, a New York- based shipbroker. Centrica, the UK’s biggest supplier of energy to homes, last month extended an import contract with Qatargas, the world’s biggest LNG producer, to December 2018 and increased volumes by 20%.
“We are offering good deals because we are ready to sell,” Ibrahim al-Ibrahim, a vice chairman of RasGas said in an interview in Doha. “We have a certain amount of gas. We want to sell it. We will sell it.”
Qatar, which this year signed supply accords with Germany’s EON SE and Petroliam Nasional Bhd’s UK unit is increasing shipments to Europe as it may from 2015 face competition from Australian projects that are closer to Asia, home to the world’s biggest consumers. The US will start exporting the super-chilled gas by 2016, the International Energy Agency in Paris said in June.
Qatar will supply an extra 6.64mn metric tonnes to Europe in 2014 in addition to the 19.65mn contracted into the region this year, the Poten data show. That is the biggest jump since 2009, when the Gulf nation started three of the world’s six largest production plants. Europe will receive a total of 71.5mn tonnes of LNG under contracts next year, according to Poten.
“Qatar is aware of the potential competitive threat posed by the Australians, Trevor Sikorski, head of natural gas, coal and carbon at Energy Aspects Ltd in London, said in a December 20 research report. ‘‘For Qatar, this is about destination options.’’
The new contracts allow Qatargas to ship volumes to markets in Asia if prices there are higher, the Doha-based company said December 17 by e-mail, declining to provide further details on cost structures.
‘‘These recently concluded fully divertible sales and purchase agreements with Petronas UK, EON and Centrica allow Qatargas to meet the needs for LNG in Europe, while retaining the ability for Qatargas to respond to demand signals from other regions, such as Asia, by diverting LNG,’’ the company said.
About three-quarters of global LNG is supplied under medium- or long-term contracts, mainly linked to oil costs, with the remainder sold under agreements lasting less than four years or on spot markets, according to the International Group of LNG Importers, a Paris-based lobby group.
Spot LNG this month rose to their highest prices since February as South American utilities and northeast Asian buyers competed for spare cargoes to offset cuts in hydroelectric and nuclear power generation. The price in Northeast Asia, the biggest consuming region, climbed 10% from a year earlier to $19 a million British thermal units in the week to December 16, according to assessments by New York-based World Gas Intelligence. The average price for spot shipments delivered to Northeast Asia is $16.47, according to Bloomberg calculations using WGI data.
Britain’s LNG terminals supplied an average 27.1mn cu m a day of gas this year, compared with 38.3mn last year and a record 69.7mn in 2010, according to flow data from National Grid. The nation was scheduled to receive one tanker this month, the least since Bloomberg started compiling ship and port data in April 2011.
Qatargas raised the annual volume under the contract with Windsor, England-based Centrica by 0.6mn tonnes to 3mn tonnes from June 2014 to December 2018. EON is set to get 1.5mn tonnes a year from Qatargas to Rotterdam for five years from 2014, while the UK unit of Malaysia’s Petroliam Nasional is set to receive 1.14mn tonnes a year for five years, according to company statements disclosing the accords.
‘‘We are doing everything we can to get Asia first,” Rasgas’s al-Ibrahim said on December. 8. “We don’t sell anything at a discount.”
LNG prices may reach a record $20 a million Btu in the next several months as demand measured by growth in regasification terminals rises five times faster than new liquefaction capacity in 2014, Bank of America Corp said on November 13. There will be no major improvements until 2015, when supply from projects in Australia and the US start to reach the market, the bank said.
“Growing demand in Asia-Pacific, the Middle East and South America combined with a limited number of LNG projects coming on-stream over the next few years is expected to keep LNG prices at significant premiums to liquid market indices, such as NBP indices,” Qatargas said. “While some new supply sources by new exporters such as Australia and the US are expected to ease the market in the next half of the decade, strong global LNG demand growth could still result in a tight market in the longer term.”
‘Qatar fund in talks to invest $200mn in India property’
The Qatar Investment Authority (QIA) is in talks to invest $200mn in residential property in India, a source with direct knowledge of the matter told Reuters.
The QIA is holding “conversations” with Kotak Realty Fund, run by Kotak Mahindra Bank Ltd, which would manage the investments on behalf of the fund, said the source, who asked not to be named because the deal has not been finalised.
Kotak would also make a small investment and plans to focus on residential property developments in major cities across Asia’s third-largest economy for the QIA, the source said.
Kotak declined to comment. The QIA did not respond to e-mails or telephone calls.
Sovereign wealth funds and other long-term investors are eyeing opportunities in India’s real estate sector, betting that property prices are bottoming out after slumping this year on the back of the slowest economic growth in a decade.
House sales in major Indian cities, including Mumbai and Delhi, fell 22% in the quarter ended September 30. House prices grew by 9% over the same period compared with double digit increases in the year-ago quarter, according to property data firm Liases Foras.
Vikram Gandhi, founder of Delhi-based VSG Capital Advisers, which has been retained by Canada Pension Plan Investment Board (CPPIB) to seek investment opportunities in the country, said the timing to invest in Indian property was ideal.
“If you have a long-term perspective and you believe that the need for capital in a country is quite high, which it is, and the supply is limited right now because people are not investing, then this is the best time to invest,” he said.
In November, CPPIB said it would invest $200mn dollars to buy leased, income-producing office buildings in a joint venture with Indian construction company, Shapoorji Pallonji Group, which will invest $50mn.
The QIA’s investment comes after the Abu Dhabi Investment Authority in July also appointed Kotak to invest $200mn in Indian real estate on its behalf, sources told Reuters at the time.
